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Accounting interview questions.

What is Service Tax & Excise? How will it be charged?

Service Tax is a form of indirect tax imposed on specified services called Taxable services. Presently it covers 58 services. The service provider but A collected shall pay a service tax from the service receiver. Excise is also a form of indirect tax levied on A goods produced or manufactured in India.
Where should TDS received should show in balance sheet?

TDS either can be deducted by other on payment/income we receive or we deduct on paymnet/expenditure we make to others. In first instance TDS will be shown in Assets side in balance sheets under current assets and in second instance TDS will be shown in balance sheet under current liability. TDS is part of advance tax for the deductee while for deductor its current liability.
What is the difference between inactive accounts and dormant account?

Inactive account means an account had not been in use for a long time and not going to be used in the future.Dormant accounts are those which are presently not in use but it is likely that it may be used in the near future.
How many accounting standards are currently published?

There are total of 9 accounting standards. ICAI issued a total of 33 accounting standards tillnow.Their applicability depends on the LEVEL of enterprises.It depicted three tier structure.

What are the fictitious assets ?

These are like intangible assets, which cannot be seen or touched. Actually, these are not assets but some expenditure, which cannot turn to profit and loss account of a particular period that is why these items are shown on assets side of balance sheet to be written off to P&L account in reasonable years.

also p&l account will be prepared. yet simple to use accounting system. multi-currency capabilities. Executive is a single-user system that can be upgraded to an unlimited number of users.input tax the vat which is paid on purchase will be deducted from vat collected from sales this adjustment is known as vat adjustment What is Executive Accounting? Executive Accounting is designed for service type businesses that require a sophisticated accountingsystem. What is Departmental Accounting? Give an example? Departmental accounting means account prepared separately for the department and here ledgers will be opened trial balance will be prepared. What is meant by public accounting? Public Accounting is best known for providing audits.Recording inventory transactions periodically than recording them continually. multiple bank account capabilities and other powerful features. Executive Accounting contains many advanced features such as three styles of invoicing (service.What is the difference between Perpetual and Periodic Inventory systems? In perpetual inventory system. distribution and recurrent). Whereas in the Periodic Inventory System: . the inventory account is adjusted continually throughout the accounting period. and profit or loss is included in the main p&l account and shown in the balance sheet What are premises in accounting sense? What is VAT adjustment? Premises is and Fixed Assed in the accounting sense which is shown in the balance sheet in final accounts Vat adjustment is out put tax . CPAs who work in public accounting review company financial records for accuracy and accountability What are the Steps involved in Project implementation? Step involved in project implementation: ► Identification of the need ► Idea generation and screening of ideas ► Feasibility Study .

Auditing is a process that checks to see whether the events occurred and it is properly recorded. Private accounting is accounting work that is done for your own company. Bank reconciliation statement statement which reconciles the bank balance as per the cash book with balance as per the pass book or bank statement by showing all causes of difference between the two. Accounting means recording of day today transaction whereas auditing means rechecking of that transaction it is properly recorded or not.ct) in business that is called dual aspects of business. and Ernst & Young) are the dominant firms that provide public accounting services. What is the dual aspect concept? according to dual aspect concept every business have two concept of business transaction one is debit second is credit transaction. What is a difference between public and private accounting? Public accounting includes any accounting work that a company performs for another company. consulting. The "Big 4" (KPMG. Every company has some form of an internal accounting department and those employees would be considered private accountants. What are the differences between accounting and auditing? Accounting records the events. This statement shows the reasons or transactions because of whichbalances as shown in cashbook and passbook are not tallying with each other.► Project Development ► Implementation ► Controlling What is bank reconciliation statement? A Bank reconciliation statements are prepared if balance of bank account as shown in cashbook differs from balance as shown in passbook.if follow the both aspects (dr. tax compliance. Exampleswould be audits. What is Purchase returns Accounting? "Purchase returns" is the entry made in the journal that refers to "Unsatisfactory or defectivemerchandise/goods which is returned back to the supplier". etc. . Deloitte & Touch?Price Waterhouse Coopers.

What are bills receivable? Bills Receivable . Consignee is the person who receives the goods and he just possesses the goods and not the owner. so we take a sample. Explain the accounts payable cycle. For example. and which are payable to him What is the difference between Consigner and Consignee? Consigner is the person who is the owner of the goods and who deliver the goods to the consignee. there is too much data to go through all this. bonds. for example cash flow What is meant by balancing? Balancing means equalizing debit and credit side totals in a T-account What is Use of statistics in accounting? Well.g. and looking at some specific data. .What is retail banking? Retail banking refers to the banking done with the retail client (e.the length of time it takes the company to pay its accounts payable . More formally. if we are looking about Ford motor corp. Statistics tells us what sample size we need What is accrual accounting? Accrual Accounting refers to the recording of financial transactions once an economic event has happened and it is not based on the movement of cash. Then we need to know how big a sample to take so we can say with 95% confidence that our results are representative of all the data. are all promissory notes. their may be too much to analyze. bills of exchange. the normal people) rather than business or organizational customers What is marginal cost? The marginal cost of an additional unit of output is the cost of the additional inputs needed to produce that output. and other evidences or securities which a merchant or trader holds. Demonstrate your knowledge of this cycle . in many accounting situations. in merchant accounts. the marginal cost is the derivative of total production costs with respect to the level of output.and what the implications of the length of this cycle are for the company..

Like machines/vehicles gets rusty/slow because of consistent use What is the difference between provision and reverse? Provisions are created in books as they are anticipated. Please give details Depreciation and its types: Depreciation means reducing/lowering value of an asset because of its use.Cess & H. which income is excess under thetax then company liable for the pay tax. & E. which might used to purchase assets or to declare dividends What is meant by partitioning? Partitioning is nothing but grouping based on the cluster. It gets more complicated than that but this is a good generic answer. What is service tax? When any employer provides any service to his customer. A Cost Accountant will follow the "widget" throughout the production process tracking any costs associated and breaking them down to a unit level. which income is excess under thetax then company liable for the pay tax.Cess =12. Accounting is the presentation and interpretation of those records to be used by management for decision making. This is used in accurate reporting of Cost of Goods Sold and consequently the Gross Income of a company.What is depreciation and how many types are there. Service tax charged at rate 12 %( India) + 3% E.Cess & H. Example: provision for depreciation Reserves are created in books as a part of profits. . Service tax charged at rate 12 %( India) + 3% E.36% When any employer provides any service to his customer. and planning. which is similar kind of response by a system. & E. What are cost accounting and its applications? Cost Accounting is a method by which an accountant can determine the cost of production of a "widget".Cess =12. improvement.36% Contrast bookkeeping and accounting Bookkeeping is the maintenance of the company's financial records.

and in the cost account. What is definition of a cash float in accounting? Cash float is the time between when you authorize a bank to disperse funds from your bank account and when it actually leaves your account What is fair value accounting? Fair Value accounting is an accounting term that requires a company to place a value on all of the assets on its balance sheet that. A trade bill is a supporting documentof business activities like purchases. Some companies issues warrants to its shareholders instead of paying dividends in the form of cash in the form of document by mentioning the Warrant Price and other details. companies are sometimes forced to place a very low value on an asset. payments etc. This is easy to do when the asset has a quoted market price. However..their are 2 columns in balance sheet left hand side is called liabilities and right hand side is called asset What is dividend warrants? Dividend is the part of profits payable to the owners of the company i. as it has been for much of 2008. it is the price at which the assets could be sold. Shareholders.What are trade bills? Every transaction must be supported by any document. When the marketplace is in turmoil and illiquid. receipts. the study of moral values and judgments as they apply to accountancy. What is cash flow and fund flow? Cash flow and funds flow: cash flow means direct entry of cash in your business and exit of the same funds flow means entry of funds (cash funds or non cash funds) and their exit non cash funds may mean rise in current assets or fall in current liabilities which was not due to any cash movement.. It is an example of professional ethics. no attempt is made a separate record of the financial account transaction . What is accounting ethics? Accounting ethics is primarily a field of applied ethics.e. sales. and thus the company has to make an estimate of fair value. What is an interlocking accounting system? The interlocking accounting is a system where the cost and financial accounts are maintained independently of each other. it is often the case that there is no liquid market for an asset. resulting in a substantial markdown from the prior value. See related links for complete explanations What is balance sheet and off balance sheet? Balance sheet is a statement which consists if asset and liabilities balance sheet is not called as account .

date. What are the uses of journal in accounting? The journal is most commonly used to record corrections to errors that have been made in writing up the general ledger accounts . shipping documents. invoice no. increased revenue or decreased expense. What is SLA? SLA . i.e. keeping method a journal entry is posted to both respective accounts for each transaction What is Capital Budget? Capital Budgeting is a way to justify capital expenditures. exceeds the cost of capital. buyer contract etc What do you consider to be the biggest challenge facing theaccounting profession today A sample answer to accounting interview questions like this is: In response to the changing market accountancy professionals have to provide moremanagement and consulting services.price. in addition to financial management. What is meaning of invoice? invoice is a document which is issued the the salesmen to buyer contain information related to purchased good such what purchased.quality.quantity. This set includes that of invoices. grantees and others. It was done to see if the added benefit of a capital purchase. Then continue to explain how you can meet this challenge. What is the TDS effect in balance sheet if TDS receipts? In Assets Side: Advance In-Come-Tax A/c Dr with TDS received Amount and Party A/c Cr with TDS received Amount What is double entry book keeping? In double entry book. They have to assume a greater advisory role and develop more complex and flexible accounting systems.What is Letter of Credit? LC (Letter of Credit) is a set of documents which are very essential for goods being transported from one country to another.Service Level Agreement Period What is peach tree accounting? Peachtree Accounting is the name of a computerized accounting software program.

Thus. What is an adjusting journal entry? Adjusting entries are those entries that passed to rectify an error or wrong entry already made some accounting soft wares have disabled edit function in the accounts. depreciation methods. overhead. maintaining. andfinancial accounting theory. recognition. it involves the theory of credit and debit. Where as costaccounting is only focused on the cost of inventory. etc What is the difference of Cost Accounting and Financial Accounting? Financial accounting encompasses all account presented on the face of the financial statement. If the bill is dishonored on the due date. If we receive a bill from that debtor. controlling accounting accounts. When we sold goods to debtors account is debited. What is the definition of accounting? The theory and system of setting up. we open bills receivable account by closing that debtor account. income statements. . and auditing the books of a firm. What are the basic assumptions in accounting? Economic Entity Assumption Going Concern Assumption Monetary Unit Periodicity Assumption What is customer account? Debtors account and bills receivable account are theoretically same. measurement and disclosures. its presentation. balance sheets.Key Difference between Indian accounting standards and internationalaccounting standards is? In international accounting LIFO and extraordinary items are prohibited. work sheets. subsidiary ledgers. What are the nine accounting cycles? Explain Accounting 101? Typically. purchases. art of analyzing the financial position and operating results of a business house from a study of its sales. bills receivable account is nothing but debtor account. so the only way to undo the mistake is to pass a correction entry or adjusting entry. Both are called as receivables.

What is the Provision? What is the Entry for Provision? Provision means liabilities it means payable account A it?s an very useful for controlling payable accounts like telephone charges. Reserve & surplus Account Why are accounting firms needed? Accounting firms come in handy for many reasons. Provision Account is Prepared for fixed future liabilities.we again debit the debtor account in our books. For information and accounting purpose. In every organisation there is limited source of capital and can not able to pay hues certain. EPF accounts. Some of the smaller ones: Businesses will use them to calculate payroll and the accounting firm will calculate the amount of taxes taken out. which any business concern use any time when they relies. A EPF payable accounts Dr to EPF accounts ESIC payable accounts Dr to ESIC account. exp. so every organisation transfer some amount to provision account. we use both debtor account and bills receivable account. . depreciation Account. ESIC accounts.